The US Flexible Film Initiative (USFFI), a nonprofit founded in 2025 by consumer brands including General Mills, Hill's, Mars, Mondelēz, Nestlé and PepsiCo, announced its first offtake agreements in late September 2026. The contracts link two California material recovery facility (MRF) operators, Valemi and GreenWaste, to two flexible-film reclaimers, EFS-plastics and Merlin Plastics, with processing capacity in the United States and Canada. USFFI says it has already moved more than 3 million pounds of flexible plastic packaging from California MRF collection programs to reclaimers, ahead of the longer-term agreements, which support up to eight loads of recycled film per month going forward. No per-load tonnage has been disclosed.

What the Deals Actually Connect

The chain runs in two steps, and each one is handled by a different kind of business. First, at a material recovery facility (MRF) — the plant where curbside recycling gets sorted — flexible film such as bags, pouches and plastic wrap is picked out from the rest of the recyclables and baled into large compressed bundles. Today, most of that film doesn't get this treatment; it gets pulled out as contamination and sent to landfill instead, because sorting it isn't worth the cost for most MRFs. Second, a reclaimer buys those film bales and reprocesses them — melting and re-pelletizing the material — into recycled plastic resin (flake or pellets) that manufacturers can use as feedstock for new products, potentially including new film. A reclaimer doesn't make film directly; it makes the recycled resin that film (or other products) can later be made from.

USFFI runs neither step itself. It's a broker that funds the gap between them: operational subsidies that pay MRFs to sort and bale film instead of discarding it, and payments that make it worth a reclaimer's while to buy that lower-grade, MRF-collected film rather than sourcing only cleaner, pre-sorted commercial scrap. The new multi-year contracts follow an initial set of completed loads, and are meant to keep this film moving on an ongoing basis rather than as a one-time pilot.

USFFI has also brought on Emerald Packaging, a converter, as its first associate member. It's now looking to expand this network: it has opened two new requests for information (RFIs) — one inviting additional California MRFs to apply, one inviting additional reclaimers and secondary processors — with both accepting applications through December 18. In other words, December 18 is the deadline for new MRFs or reclaimers to apply to join the funded program; it isn't a deadline tied to the contracts already signed.

Why a Modest Volume Still Matters

Regenport covered the demand side of this problem in September, in "Recycled PE Film in 2026: Why Demand, Not Collection, Is the Bottleneck". Industry and NGO reporting had modeled meaningful long-term absorption potential for recycled PE film, starting from what household-collected film is actually like: unlike pre-sorted commercial scrap, which typically arrives as a single known resin in a consistent color, it mixes resins (LDPE, LLDPE, sometimes some HDPE), varies in color, and carries more contamination. That's why the reporting found this material could only go into applications tolerant of color variation, cosmetic defects, and mixed resin composition — thick-gauge industrial liners or dark-colored trash bags, for instance — and why most reclaimers in North America aren't equipped to accept it in the first place. That left an open question: whether anyone would actually pay for that specific, harder-to-place material stream.

These contracts are one answer to that question, in one state. The volume moved so far is small relative to national film tonnage, and the reporting gives no figures that would support a broader supply or pricing claim. What it does show is that MRF-grade film can clear a market when a funding gap between collection and reclaiming is deliberately filled — which is a different, narrower claim than "recycled PE film demand is growing."

The SB 54 Pressure Behind It

California's SB 54 extended producer responsibility law is reported to set a 30% recycling rate target for covered packaging by 2028, with single-use packaging and plastic foodware required to be recyclable or compostable by 2032. USFFI's stated rationale is that flexible packaging's progress toward those targets had been too slow, which is why it is directing funding specifically at the collection-to-reclaiming link rather than at collection volume alone.

USFFI has said it could expand its model to other states as packaging EPR programs develop there — reportedly including conversations tied to Minnesota and Washington. That's a stated intention from the initiative's leadership, not a confirmed commitment, and there's no public timeline attached to it.

What This Means for Recycled PE Film Buyers

• This doesn't change national bale pricing or availability yet. No volume data in the reporting supports that conclusion — treat this as an infrastructure signal, not a supply forecast.

• MRF-collected film now has a documented, funded route to reclaimers. USFFI subsidizes both the MRFs' sorting/baling step and the reclaimers' feedstock purchases — this is a funded pipeline, not simply a reclaimer choosing on its own to pay for lower-grade film. Still worth asking any supplier whether their feedstock is MRF-collected or pre-sorted commercial material — the two have different contamination and consistency profiles.

• "SB 54-aligned" claims deserve the same scrutiny as any compliance claim. Ask which specific program or contract a supplier is referencing, whether it's California-specific, and whether the volumes involved are disclosed or estimated.

• Watch the two new RFIs. Whether USFFI's model turns into an ongoing, scaling program — rather than a single pilot batch of contracts — will show up in whether the MRF-side and reclaimer-side RFIs (both due December 18) produce new agreements.

Frequently Asked Questions

What is USFFI? The US Flexible Film Initiative is a nonprofit founded in 2025 by consumer brands — funders are reported to include General Mills, Hill's, Mars, Mondelēz, Nestlé and PepsiCo. It funds flexible-film recycling infrastructure in California by acting as a broker between MRFs and reclaimers, rather than collecting or processing film itself.

What did the new offtake agreements actually commit to? Multi-year contracts between two California MRF operators (Valemi and GreenWaste) and two flexible-film reclaimers (EFS-plastics and Merlin Plastics, with processing capacity in the US and Canada), supporting up to eight loads of recycled flexible film per month going forward. USFFI reports more than 3 million pounds already moved from California MRF collection programs to reclaimers ahead of these longer-term agreements; per-load tonnage hasn't been disclosed.

Does this change recycled PE film availability or pricing today? Not at a scale that would move national bale pricing or supply — the reporting provides no volume data to support that. What changed is that MRF-collected film now has a documented, funded route to reclaimers in at least one state, addressing a gap flagged in earlier reporting on flexible-film end markets.

About This Article

Informational summary as of October 2026, based on trade reporting on USFFI's first offtake contracts for California flexible-film recycling and publicly available summaries of California SB 54's packaging requirements. It is not sourcing, compliance, or legal advice. Contract terms, volumes, and program eligibility should be confirmed directly with the organizations involved.

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Sources

Maria Rachal, Packaging Dive, "USFFI announces first offtake agreements for California film recycling" → Read the Source

Antoinette Smith, Resource Recycling, "USFFI signs first film offtake deals" → Read the Source